Honda Motor Co and General Motor Co will develop affordable electric vehicles jointly in major markets around the globe. This partnership will expand the already existing tie-up in Self-driven and battery technology and gas-powered models.
The collaboration for EVs
In a statement on Tuesday, the two automakers said that they plan to establish a new architecture based on the Ultium EV battery made by GM and which will be used for small crossover SUVs. The first models are expected to be available in 2027 in North America.
As per Bloomberg News, the new project is expected to manufacture EVs priced below the $30,000 Chevrolet Equinox planned by GM and other similar offerings in the future by Honda, as per the two companies’ call conversation with journalists.
Mary Barra, CEO of GM, said that the two companies would share their best design, technology, and manufacturing approaches to deliver EVs on a global scale that is desirable and affordable globally, including the key markets in South and North America and China.
The collaboration will be a significant move and is expected to democratize the electric vehicles that are expensive out of bounds for many consumers today. By joining hands, Honda and GM are expected to reduce battery costs and develop EVs at prices that even Tesla Inc., the market leader, has stopped pursuing.
Honda and GM aim to deepen ties with this move, share progress costs, and increase sales. Since 2013, the two automakers have been jointly working on hydrogen fuel cells, and now the recently announced collaboration on EV gas-powered vehicles, EV batteries, and self-driven technology.
GM stocks declined by less than 1 % in New York. It had tumbled 26%, while the S&P 500 index fell by 3.9 %. The ADR of Honda fell by 1.6% on Tuesday.
Last year, Honda was the first-ever Japanese automaker to declare that it would stop selling gasoline-powered vehicles with a target to phase them out entirely by 2040. GM plans to make and sell EVs by 2025 and phase out its diesel and gasoline-powered cars by 2035.
According to a statement on Tuesday by the CEO of Honda, Toshihiro Mibe, Honda is committed to being carbon neutral by 2050 globally. This will require them to bring down the costs and take ownership of EVs possible for many more customers.
Honda and GM have been developing crossover utility sports vehicles and engines to cut costs and direct spending toward Electric Vehicles. In 2020 the companies said they were planning to cooperate in research activities and areas related to purchases of parts and materials.
The 2020 tie-up with GM was a massive step for Honda as they had long eschewed strategic alliances. Last month, Honda had announced a tie-up with Sony Corp. for developing batteries.
